ASA LIMITED 36 WIERDA ROAD WEST
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) WIERDA VALLEY, SANDTON
SOUTH AFRICA
TO THE SHAREHOLDERS:
At May 31, 2000 the Company's net assets were equivalent to R128.25
($18.43) per share. This compares with R138.62 ($22.51) per share at November
30, 1999 the end of the Company's previous fiscal year. Net asset values are
computed in terms of rand, the currency of the Republic of South Africa, and
then converted to United States dollars at the rand exchange rate as described
in Note (1)B, on page 7. The most recent net asset value similarly calculated
was R132.85 ($19.20) per share at June 22, 2000 at which date our shares sold at
$15.94 per share, a discount of 17% to the net asset value.
Net investment income for the six months ended May 31, 2000 was equivalent
to $.35 per share vs. $.31 for the same period last year. The Board of Directors
declared a dividend of $.15 per share on April 28, 2000 payable May 26, 2000 to
shareholders of record on May 19, 2000.
In early June the gold price stood at a level very close to that attained
on November 30, 1999 ($289.20 per ounce) and yet the Philadelphia Stock
Exchange's gold stock index (XAU) declined during this period by 8.2%. The price
of the stocks of the gold producers have declined to a point where the ratio of
the XAU to the price of gold is close to the low levels attained in 1986, early
1992 and more recently in 1998. There is some comfort in noting that on all
three of these occasions the low in the XAU/gold ratio occurred just before an
important advance in the gold price.
Official sales principally from the United Kingdom and Switzerland continue
to limit improvement in the gold price. The effect of this selling is as much
psychological as it is real, as the amount earmarked for sale could probably be
easily absorbed by the market.
Historically, central banks have usually sold gold near the bottom of the
market. The Bank of England sold gold in the late 1920's, 1960's, and in the
late 1970's--in each instance these sales occurred just before the gold price
increased significantly. In 1999 and 2000 the Bank is again selling gold.
The gold industry has been responding to the challenge of lower prices
through merger, rationalization, more efficient management practices, and the
use of new technology. New South African mining giants have emerged such as
Anglogold and Gold Fields. In the United States, Newmont Mining Corporation, the
largest gold producer in the United States, recently announced their intention
to acquire Battle Mountain Gold. In Canada, the merger of Franco Nevada with
Euro Nevada forming a new Franco Nevada has created still another mining giant.
The recent announcement of the proposal to merge Franco Nevada and Gold Fields
has projected this trend internationally. The resulting company, to be called
Gold Fields International, plans to have one-third of its operation in South
Africa, one-third in North America, and one-third elsewhere.
There is probably still a long way to go in consolidation of the gold
producers. Perhaps with a more centralized and better financed gold mining
industry there may be less reason or inclination for the industry to depress the
price of their product by selling forward into a lackluster market in order to
hedge against a decline in price or finance future production.
Our gold investments have generally followed the downward trend in the
market. However, an approximately 30% improvement in the price of DeBeers since
its low last March was driven by an 11% improvement in sales last year to a
record $5.2 billion. If the present rate of sales continues the company could
record over $5.5 billion in sales in 2000. Platinum and palladium prices have
been extremely volatile, reflecting the uncertainties of Russian deliveries and
strong demand from the automobile and jewelry industries. The market value of
the stocks of our two platinum metals producers, Impala and Anglo American, have
increased 3.65% in rand terms since November 30, 1999. Unfortunately, the 12%
decline in the value of the rand from $.16 to $.14 more than offset this
advance.
The weakness in the rand is largely attributed to the perception that
government sponsored land seizures in Zimbabwe may cause social, economic and
political de-stabilization across the border into South Africa. This perception
overlooks many important strengths that South Africa enjoys relative to Zimbabwe
and almost all other emerging countries. These strengths include:political
stability, fiscal and monetary restraint, exchange control and tariff
relaxation, a sound banking system, organized government spending priorities and
well developed capital markets.
1
<PAGE>
At the Company's Annual Meeting held February 4, 2000, at least 7,134,147
shares (approximately 74 percent of the outstanding shares) were voted for the
following directors: Robert J.A. Irwin, Henry R. Breck, Harry M. Conger, Chester
A. Crocker, Joseph C. Farrell, James G. Inglis, Malcolm W. MacNaught, Ronald L.
McCarthy, Robert A. Pilkington and A. Michael Rosholt. The selection of Arthur
Andersen LLP to serve as auditors for the year 2000 was approved by a vote of
7,129,919 shares for, 31,412 shares against and 55,137 abstained.
I would like to call to your attention the availability of the Dividend
Reinvestment Plan. Any inquiries in regard to the plan should be directed to
EquiServe-First Chicago Trust Division ("FCTD"), Dividend Reinvestment Plan,
P.O. Box 2598, Jersey City, NJ, 07303-2598, U.S.A. Also FCTD is now able to
communicate with shareholders through the Internet. The only requirement for
shareholder participation is use of a personal computer and access to an
electronic mail package. The FCTD address is "[email protected]" and access is
available 24-hours a day. In addition, FCTD has established a Response Center to
respond to shareholders' questions in a timely manner. The telephone number is
201-324-0498. The Response Center is available Monday through Friday between
8:30 a.m. and 7 p.m. (Eastern Standard Time).
Robert J. A. Irwin
June 23, 2000 CHAIRMAN OF THE BOARD
2
<PAGE>
SCHEDULE OF INVESTMENTS
(NOTE 1)
May 31, 2000
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Number of South African United States Percent of
Name of Company Shares Rand Dollars Net Assets
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ORDINARY SHARES OF GOLD MINING COMPANIES
SOUTH AFRICAN GOLD MINES
Anglogold Limited 1 194 947 R 332 195 266 27.0%
Gold Fields Limited 10 794 979 272 033 470 22.0
Western Areas Limited 600 300 8 884 440 .7
Harmony Gold Mining Company Limited - ADRs 153 336 5 213 424 .4
-------------------------------------------------------------------------------------------------------------------
618 326 600 $ 88 840 029 50.1
-------------------------------------------------------------------------------------------------------------------
CANADIAN GOLD MINES
Barrick Gold Corporation 282 000 35 574 300 2.9
Franco-Nevada Mining Corporation Limited 306 460 25 810 061 2.1
Placer Dome Incorporated 365 312 20 819 130 1.7
-------------------------------------------------------------------------------------------------------------------
82 203 491 11 810 846 6.7
-------------------------------------------------------------------------------------------------------------------
700 530 091 100 650 875 56.8
-------------------------------------------------------------------------------------------------------------------
ORDINARY SHARES OF OTHER COMPANIES
Anglo American Platinum Corporation Limited 1 014 800 195 856 400 15.9
Anglo American PLC 320 000 96 896 000 7.9
De Beers Consolidated Mines Limited/Centenary AG 1 001 300 150 996 040 12.3
Impala Platinum Holdings Limited 262 700 61 209 100 5.0
-------------------------------------------------------------------------------------------------------------------
504 957 540 72 551 371 41.1
-------------------------------------------------------------------------------------------------------------------
Total Investments, at Market Value 1 205 487 631 173 202 246 97.9
CASH AND OTHER ASSETS LESS PAYABLES 25 684 641 3 713 059 2.1
-------------------------------------------------------------------------------------------------------------------
Total Net Assets R 1 231 172 272 $ 176 915 305 100.0%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The Company's accounts are maintained in rand, the currency of the Republic of
South Africa. United States dollar amounts are shown solely for the convenience
of United States shareholders. There is no assurance that the valuations at
which the Company's investments are carried could be realized upon sale.
The notes to the financial statements form an integral part of these statements.
3
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
May 31, 2000 May 31, 1999
South African United States South African United States
ASSETS Rand Dollars Rand Dollars
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investments, at market value (Note 1)
Gold mining companies--
Cost R 194 834 006 $ 91 377 489 in 2000
R 191 775 236 $ 91 265 759 in 1999 R 700 530 091 $100 650 875 R 597 906 769 $ 96 281 284
Other companies--
Cost R 80 132 354 $ 34 342 056 in 2000
R 80 132 354 $ 34 342 056 in 1999 504 957 540 72 551 371 381 005 920 61 353 610
-------------------------------------------------------------------------------------------------------------------
1 205 487 631 173 202 246 978 912 689 157 634 894
Cash in banks 9 483 826 1 362 618 29 202 912 4 702 562
Bank time deposits 12 180 000 1 750 000 -- --
Dividends and interest receivable 4 269 699 613 462 3 592 171 578 449
Other assets 608 116 110 111 549 920 104 957
-------------------------------------------------------------------------------------------------------------------
Total assets 1 232 029 272 177 038 437 1 012 257 692 163 020 862
-------------------------------------------------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------------------------------------------------
Accounts payable and accrued liabilities 857 000 123 132 827 300 133 221
-------------------------------------------------------------------------------------------------------------------
Total liabilities 857 000 123 132 827 300 133 221
-------------------------------------------------------------------------------------------------------------------
NET ASSETS (SHAREHOLDERS' INVESTMENT)
-------------------------------------------------------------------------------------------------------------------
Ordinary (common) shares R0.25 nominal (par) value
Authorized: 24,000,000 shares
Issued & Outstanding: 9,600,000 shares 2 400 000 3 360 000 2 400 000 3 360 000
Share premium (capital surplus) 19 636 586 27 489 156 19 636 586 27 489 156
Undistributed net investment income 21 695 051 56 715 979 21 543 617 56 531 139
Undistributed net realized gain (loss) from
foreign currency transactions 5 576 224 (28 660 969) 3 920 469 (28 896 228)
Undistributed net realized gain on investments 243 499 635 71 253 751 249 152 048 72 836 263
Net unrealized appreciation on investments 930 561 540 47 482 633 707 045 368 32 027 010
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies 7 803 236 (725 245) 7 732 304 (459 699)
-------------------------------------------------------------------------------------------------------------------
Net assets R1 231 172 272 $176 915 305 R1 011 430 392 $162 887 641
-------------------------------------------------------------------------------------------------------------------
Net assets per share R128.25 $ 18.43 R 105.36 $ 16.97
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The closing price of the Company's shares on the New York Stock Exchange
was $15.3125 on May 31, 2000 and $16.5625 per share on May 31, 1999.
The notes to the financial statements form an integral part of these
statements.
4
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six months ended
-------------------------------------------------------------------------------------------------------------------
May 31, 2000 May 31, 1999
South African United States South African United States
Rand Dollars Rand Dollars
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income
Dividends R 28 332 818 $ 4 423 497 R 23 387 943 $ 3 791 825
Interest 688 431 104 254 1 340 420 218 916
-------------------------------------------------------------------------------------------------------------------
29 021 249 4 527 751 24 728 363 4 010 741
-------------------------------------------------------------------------------------------------------------------
Expenses
Shareholders' report and proxy expenses 840 053 127 267 384 436 64 704
Directors' fees and expenses 1 631 292 246 683 1 356 796 223 599
Salaries 1 094 911 169 963 945 609 156 929
Other administrative expenses 1 100 516 172 627 1 040 347 173 473
Transfer agent, registrar and custodian 448 900 66 601 364 453 59 334
Professional fees and expenses 719 456 110 508 519 125 85 383
Insurance 255 434 40 191 248 758 41 154
Other 1 320 741 203 185 1 208 484 198 724
-------------------------------------------------------------------------------------------------------------------
7 411 303 1 137 025 6 068 008 1 003 300
-------------------------------------------------------------------------------------------------------------------
Net investment income 21 609 946 3 390 726 18 660 355 3 007 441
-------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) from
investments and foreign currency transactions
Net realized gain from investments
Proceeds from sales -- -- 68 886 627 11 384 059
Cost of securities sold -- -- 27 106 338 3 819 287
-------------------------------------------------------------------------------------------------------------------
Net realized gain from investments -- -- 41 780 289 7 564 772
-------------------------------------------------------------------------------------------------------------------
Net realized (loss) from foreign currency transactions
Investments -- -- -- (9 630 594)
Foreign currency transactions (29 344) (413 681) (307 736) (169 073)
-------------------------------------------------------------------------------------------------------------------
Net realized (loss) from foreign currency
transactions (29 344) (413 681) (307 736) (9 799 667)
-------------------------------------------------------------------------------------------------------------------
Net (decrease) in unrealized appreciation
on investments
Balance, beginning of period 1 034 686 836 86 494 686 778 778 375 49 646 548
Balance, end of period 930 561 540 47 482 633 707 045 368 32 027 010
-------------------------------------------------------------------------------------------------------------------
Net (decrease) in unrealized appreciation (104 125 296) (39 012 053) (71 733 007) (17 619 538)
-------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency 2 277 623 (221 135) 2 293 500 85 096
-------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss) from
investments and foreign currency (101 877 017) (39 646 869) (27 966 954) (19 769 337)
-------------------------------------------------------------------------------------------------------------------
Net (decrease) in net assets resulting
from operations R (80 267 071) $(36 256 143) R (9 306 599) $(16 761 896)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The notes to the financial statements form an integral part of these
statements.
5
<PAGE>
STATEMENTS OF SURPLUS AND STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six months ended
-------------------------------------------------------------------------------------------------------------------
May 31, 2000 May 31, 1999
South African United States South African United States
STATEMENTS OF SURPLUS Rand Dollars Rand Dollars
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Share premium (capital surplus)
Balance, beginning and end of period R 19 636 586 $27 489 156 R 19 636 586 $27 489 156
-------------------------------------------------------------------------------------------------------------------
Undistributed net investment income
Balance, beginning of period R 19 424 305 $56 205 253 R 20 681 662 $ 56 403 698
Net investment income for the period 21 609 946 3 390 726 18 660 355 3 007 441
-------------------------------------------------------------------------------------------------------------------
41 034 251 59 595 979 39 342 017 59 411 139
Dividends paid (19 339 200) (2 880 000) (17 798 400) (2 880 000)
-------------------------------------------------------------------------------------------------------------------
Balance, end of period R 21 695 051 $56 715 979 R 21 543 617 $ 56 531 139
-------------------------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from
foreign currency transactions
Balance, beginning of period R 5 605 568 $(28 247 288) R 4 228 205 $ (19 096 561)
Net realized (loss) for the period (29 344) (413 681) (307 736) (9 799 667)
-------------------------------------------------------------------------------------------------------------------
Balance, end of period R 5 576 224 $(28 660 969) R 3 920 469 $ (28 896 228)
-------------------------------------------------------------------------------------------------------------------
Undistributed net realized gain on investments
(Computed on identified cost basis)
Balance, beginning of period R 243 499 635 $71 253 751 R 207 371 759 $ 65 271 491
Net realized gain for the period -- -- 41 780 289 7 564 772
-------------------------------------------------------------------------------------------------------------------
Balance, end of period R 243 499 635 $71 253 751 R 249 152 048 $ 72 836 263
-------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
on investments
Balance, beginning of period R 1 034 686 836 $86 494 686 R 778 778 375 $ 49 646 548
(Decrease) for the period (104 125 296) (39 012 053) (71 733 007) (17 619 538)
-------------------------------------------------------------------------------------------------------------------
Balance, end of period R 930 561 540 $47 482 633 R 707 045 368 $ 32 027 010
-------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency
Balance, beginning of period R 5 525 613 $ (504 110) R 5 438 804 $ (544 795)
Net unrealized appreciation (depreciation)
for the period 2 277 623 (221 135) 2 293 500 85 096
-------------------------------------------------------------------------------------------------------------------
Balance, end of period R 7 803 236 $ (725 245) R 7 732 304 $ (459 699)
-------------------------------------------------------------------------------------------------------------------
Six months ended
-------------------------------------------------------------------------------------------------------------------
May 31, 2000 May 31, 1999
South African United States South African United States
STATEMENTS OF CHANGES IN NET ASSETS Rand Dollars Rand Dollars
-------------------------------------------------------------------------------------------------------------------
Net investment income R 21 609 946 $ 3 390 726 R 18 660 355 $ 3 007 441
Net realized gain from investments -- -- 41 780 289 7 564 772
Net realized (loss) from foreign currency
transactions (29 344) (413 681) (307 736) (9 799 667)
Net (decrease) in unrealized appreciation
on investments (104 125 296) (39 012 053) (71 733 007) (17 619 538)
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currency 2 277 623 (221 135) 2 293 500 85 096
-------------------------------------------------------------------------------------------------------------------
(80 267 071) (36 256 143) (9 306 599) (16 761 896)
Dividends paid from net investment income (19 339 200) (2 880 000) (17 798 400) (2 880 000)
-------------------------------------------------------------------------------------------------------------------
Total (decrease) (99 606 271) (39 136 143) (27 104 999) (19 641 896)
Net assets, beginning of period 1 330 778 543 216 051 448 1 038 535 391 182 529 537
-------------------------------------------------------------------------------------------------------------------
Net assets, end of period R1 231 172 272 $ 176 915 305 R 1 011 430 392 $ 162 887 641
-------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--The following is a summary
of the Company's significant accounting policies:
A. INVESTMENTS
Security transactions are recorded on the respective trade dates.
Securities owned are reflected in the accompanying financial statements at
quoted market value. The difference between cost and current market value
is reflected separately as net unrealized appreciation (depreciation) on
investments. The net realized gain or loss from the sale of securities is
determined for accounting purposes on the basis of the cost of specific
certificates.
Substantially all shares in the Company's portfolio are traded on the
Johannesburg Stock Exchange. The Company cannot trade in securities markets
other than the Johannesburg Stock Exchange without permission of the South
African Exchange Control Authorities.
Quoted market value of those shares traded on the Johannesburg Stock
Exchange or other stock exchanges, as applicable, represents the last
recorded sales price on the financial statement date, or the mean between
the closing bid and asked prices of those securities not traded on that
date. In the event that a mean price cannot be computed due to the absence
of either a bid or an asked price, then the bid price plus 1% or the ask
price less 1%, as applicable, is used.
There is no assurance that the valuation at which the Company's investments
are carried could be realized upon sale.
B. TRANSLATION OF SOUTH AFRICAN RAND INTO UNITED STATES DOLLARS
The Company's accounts are maintained in rand, the currency of the Republic
of South Africa. United States dollar amounts are shown solely for the
convenience of United States shareholders. The Company translates rand into
U.S. dollars at the current rand exchange rate in computing its net asset
values. At May 31, 2000, the rand exchange rate was approximately R6.96 to
the dollar ($.14 to the rand).
United States dollar equivalents have been determined at appropriate rates
of exchange as follows:
(i) Purchases, sales, receipts and expenditures are translated at
the approximate official rates of exchange in effect at the respective
dates of such transactions.
(ii) Assets, including investment securities, at quoted market
value (Note (1) A), and liabilities at each reporting date are
translated at the official exchange rate in effect at such date.
(iii) Ordinary shares outstanding and share premium (capital
surplus) accounts are translated at historical rates, averaging $1.40
to the rand.
C. EXCHANGE GAINS AND LOSSES
The Company records exchange gains and losses in accordance with the
provisions of the American Institute of Certified Public Accountants
Statement of Position 93-4, Foreign Currency Accounting and Financial
Statement Presentation for Investment Companies ("SOP"). The SOP requires
separate disclosure in the accompanying financial statements of net
realized gain (loss) from foreign currency transactions, and
7
<PAGE>
inclusion of unrealized gain (loss) on the translation of currency as part
of net unrealized appreciation (depreciation) on translation of assets and
liabilities in foreign currency.
D. SECURITY TRANSACTIONS AND INVESTMENT INCOME
There were no purchases or sales of securities for the six months ended May
31, 2000. During the six months ended May 31, 1999 sales of securities
amounted to $11,384,059 and purchases of securities amounted to $8,965,647.
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date (the
date on which the securities would be sold ex-dividend). Interest income is
recognized on the accrual basis.
E. DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders are recorded on the ex-dividend date.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that effect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses for the period. Actual results could
differ from those estimates.
(2) TAX STATUS OF THE COMPANY--There is no South African tax on dividends
received by the Company and it is exempt from tax on gains realized on the sale
of securities, provided, as has been the Company's practice, that its purchases
of securities are made for investment purposes. Effective June 1992, the Company
is no longer subject to tax on interest income. Exemption has been granted to
the Company from the payment of a Secondary Tax on Companies. The Company (a
South African corporation) intends to conduct its business in a manner that will
not subject it to United States income or capital gain taxes.
The South African Minister of Finance has recently announced proposed
amendments to the South African ("SA") tax system in the 2000 National Budget.
If enacted into law, certain of the Company's income might be subject to
taxation. Due to the uncertainty surrounding these proposed changes to the SA
tax system and their applicability to the Company, management has not assessed
the ultimate impact on the Company's financial position.
The reporting for financial statement purposes of distributions made during
the period from net investment income or net realized gains may differ from
their ultimate reporting for U.S. federal income tax purposes. These differences
primarily are caused by the separate line item reporting for financial statement
purposes of foreign exchange gains or losses. See page 10 for additional tax
information for United States shareholders.
(3) CURRENCY EXCHANGE--There are exchange control regulations restricting
the transfer of funds from South Africa. In 1958 the South African Reserve Bank,
in the exercise of its powers under such regulations, advised the Company that
the exchange control authorities would permit the Company to transfer to the
United States in dollars both the Company's capital and its gross income,
whether received as dividends or as profits on the sale of investments, at the
current official exchange rate prevailing from time to time. Future
implementation of exchange control policies could be influenced by national
monetary considerations that may prevail at any given time.
(4) RETIREMENT PLAN--Effective April 1, 1989, the Company established a
defined contribution plan (the "Plan") to replace its previous pension plan. The
Plan covers all full-time employees. The Company will contribute 15% of each
covered employee's salary to the Plan. The Plan provides for immediate vesting
by the employee without regard to length of service. During the six months ended
May 31, 2000, there was no retirement plan expense and in the six months ended
May 31, 1999, retirement plan expense aggregated R6,912 ($1,206). In addition,
in 1998 the Company renewed an annuity policy owned by the Company, for the
benefit of the Chairman, at an annual cost of $28,125 per year for five years.
8
<PAGE>
The notes to the financial statements form an integral part of these
statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six months ended Year ended November 30
---------------------------------------------------------------------------------------------------------------------------
May 31 May 31
2000 1999 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------
South African Rand
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period R 138.62 R 108.18 R 108.18 R 99.38 R 161.77 R 127.19 R 181.42
---------------------------------------------------------------------------------------------------------------------------
Net investment income 2.25 1.94 3.56 3.59 4.43 4.52 5.17
Net realized gain from investments -- 4.35 3.76 1.91 -- 1.50 2.39
Net realized gain (loss) from foreign
currency transactions -- (.03) .14 .19 .11 (.12) .10
Net increase (decrease) in net unrealized
appreciation on investments (10.85) (7.47) 26.66 7.61 (61.40) 34.03 (54.67)
Net unrealized appreciation (depreciation)
on translation of assets and
liabilities in foreign currency .24 .24 .01 (.09) .02 .62 .01
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations (8.36) (.97) 34.13 13.21 (56.84) 40.55 (47.00)
Less dividends and distributions (2.01) (1.85) (3.69) (4.41) (5.55) (5.97) (7.23)
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period R 128.25 R 105.36 R 138.62 R 108.18 R 99.38 R 161.77 R 127.19
--------------------------------------------------------------------------------------------------------------------------
United States Dollars
---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.51 $ 19.01 $ 19.01 $ 20.45 $ 35.09 $ 34.66 $ 51.10
---------------------------------------------------------------------------------------------------------------------------
Net investment income .35 .31 .58 .66 .97 1.10 1.43
Net realized gain from investments -- .79 .62 .32 -- .39 .65
Net realized (loss) from foreign
currency transactions (.04) (1.02) (.95) (.11) -- (.71) (.93)
Increase (decrease) in net unrealized
appreciation on investments (4.07) (1.83) 3.84 (1.49) (14.41) 1.05 (15.58)
Net unrealized appreciation (depreciation)
on translation of assets and
liabilities in foreign currency (.02) .01 .01 (.02) -- -- (.01)
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.78) (1.74) 4.10 (.64) (13.44) 1.83 (14.44)
Less dividends and distributions (.30) (.30) (.60) (.80) (1.20) (1.40) (2.00)
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 18.43 $ 16.97 $ 22.51 $ 19.01 $ 20.45 $ 35.09 $ 34.66
---------------------------------------------------------------------------------------------------------------------------
Market value per share, end of period $15.3125 $16.5625 $ 19.125 $ 19.125 $ 20.625 $ 37.625 $ 39.000
TOTAL INVESTMENT RETURN(1)
Based on market value per share (18.49%) (11.80%) 3.44% (3.30%) (42.86%) (.28%) (6.36%)
RATIOS TO AVERAGE NET ASSETS(1)
Expenses .58% .60% 1.13% 1.15% .71% .49% .53%
Net investment income 1.72% 1.81% 3.02% 3.34% 3.25% 2.72% 3.47%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $176 915 $162 888 $216 051 $182 530 $196 301 $336 882 $332 691
Portfolio turnover rate -- 5.65% 6.66% 1.06% -- 1.79% 2.40%
</TABLE>
Per share calculations are based on the 9,600,000 shares outstanding.
(1) Determined in dollar terms.
SUPPLEMENTARY INFORMATION
Six months ended May 31 2000
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
South African Rand
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Certain fees incurred by the company
Directors' fees R 722 968
Officers' salaries 720 728
Arthur Andersen (Auditors) 204 352
Ranquin Associates (South African Secretary) 285 000
</TABLE>
9
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of
Directors of ASA Limited:
We have audited the accompanying statements of assets and liabilities of
ASA Limited (incorporated in the Republic of South Africa) as of May 31, 2000
and 1999, including the schedule of investments as of May 31, 2000, the related
statements of operations, surplus and changes in net assets for the six months
ended May 31, 2000 and 1999, the financial highlights for the six month periods
ended May 31, 2000 and 1999, and for each of the five years in the period ended
November 30, 1999 and the accompanying supplementary information for the six
months ended May 31, 2000. These financial statements, financial highlights and
supplementary information are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements,
financial highlights and supplementary information based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements,
financial highlights and supplementary information are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, financial highlights
and supplementary information. Our procedures included the physical examination
or confirmation of securities owned as of May 31, 2000 and 1999 by
correspondence with the custodians. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements, financial highlights and
supplementary information referred to above present fairly, in all material
respects, the financial position of ASA Limited as of May 31, 2000 and 1999, the
results of its operations and changes in its net assets for the six months ended
May 31, 2000 and 1999, its financial highlights for the six month periods ended
May 31, 2000 and 1999 and for each of the five years in the period ended
November 30, 1999 and its supplementary information for the six months ended May
31, 2000 in conformity with accounting principles generally accepted in the
United States.
Arthur Andersen & Co.
Johannesburg, South Africa
Arthur Andersen LLP
New York, N.Y., U.S.A.
June 28, 2000
----------------------
CERTAIN TAX INFORMATION FOR UNITED STATES SHAREHOLDERS
From December 1, 1963 through November 30, 1987, the Company was treated as
a "foreign investment company" for United States federal income tax purposes
pursuant to Section 1246 of the Internal Revenue Code (the "Code"). Under
Section 1246 of the Code, a United States shareholder who has held his shares of
the Company for more than one year is subject to tax at ordinary income tax
rates on his profit (if any) on a sale of his shares to the extent of his
"ratable share" of the Company's earnings and profits accumulated for the period
during which he held those shares between December 1, 1963 and November 30,
1987. If such shareholder's profit on the sale of his shares exceeds such
ratable share and he held his shares for more than one year, then, subject to
the discussion below regarding the United States federal income tax rules
applicable to taxable years of the Company beginning after November 30, 1987, he
is subject to tax at long term capital gain rates on the excess.
10
<PAGE>
The Company's per share earnings and profits accumulated (undistributed) in
each of the fiscal years from 1964 through 1987 is given below in United States
currency. All the per share amounts give effect to the two-for-one stock splits
that became effective on May 10, 1966, May 10, 1973 and May 9, 1975. All the per
share amounts reflect distributions through November 30, 1999.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30 PER YEAR PER DAY YEAR ENDED NOVEMBER 30 PER YEAR PER DAY
---------------------- -------- ------- ---------------------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
1964 ....... $ .042 $.00012 1976 .......... .370 .00101
1965 ....... .067 .00019 1977 .......... .083 .00023
1966 ....... .105 .00029 1978 .......... .357 .00098
1967 ....... .277 .00076 1979 .......... .219 .00060
1968 ....... .241 .00066 1980 .......... 1.962 .00538
1969 ....... .461 .00126 1981 .......... .954 .00261
1970 ....... .218 .00060 1982 .......... .102 .00028
1971 ....... .203 .00056 1983 .......... -0- -0-
1972 ....... .445 .00122 1984 .......... -0- -0-
1973 ....... .497 ,00136 1985 .......... (.151) (.00041)
1974 ....... 1.151 .00316 1986 .......... -0- -0-
1975 ....... .851 .00233 1987 .......... -0- -0-
</TABLE>
Under rules enacted by the Tax Reform Act of 1986, the Company became a
"passive foreign investment company" (a "PFIC") on December 1, 1987. The manner
in which these rules apply depends on whether a United States shareholder elects
either to treat the Company as a qualified electing fund ("QEF") with respect to
Company shares, or for taxable years of such United States shareholder beginning
after December 31, 1997, to "mark-to-market" his Company shares as of the close
of each taxable year, or make neither of these elections.
In general, if a United States shareholder of the Company does NOT make
either such election, any gain realized on the direct or indirect disposition of
Company stock by the United States shareholder will be treated as ordinary
income. In addition, such non-electing United States shareholder will be subject
to an "interest charge" on part of his tax liability with respect to such gain,
as well as with respect to certain "excess distributions" made by the Company.
Furthermore, shares held by such non-electing United States shareholder may be
denied the benefit of any otherwise applicable increase in tax basis at death.
Under proposed regulations, a "disposition" would immune a U.S. taxpayer
becoming a nonresident alien.
If the United States shareholder elects to treat the Company as a QEF with
respect to his interest therein for the first year he holds his shares during
which the Company is a PFIC (or who later makes the QEF election and also elects
to treat his interest generally as if they were sold for their fair market value
on the first day of the first taxable year of the Company for which the QEF
election is effective), the rules described in the preceding paragraph generally
will not apply. Instead, the electing United States shareholder would include
annually in his gross income his pro rata share of the Company's ordinary
earnings and not capital gain (his "QEF" inclusion) regardless of whether such
income or gain was actually distributed. A United States shareholder who made
the QEF election for the first year he held his shares during which the Company
was a PFIC (or who later made the election and also elected to treat his shares
generally as if it were sold on the first day of the first taxable year of the
Company for which the QEF election is effective) would recognize capital gain on
any profit from the actual sale of his shares if those shares were held as
capital assets, except to the extent of the shareholder's ratable share of the
earnings and profits of the Company accumulated between December 1, 1963 and
November 30, 1987, as described above.
Alternatively, if the United States shareholder makes the mark-to-market
election with respect to Company shares, such electing United States shareholder
would be required annually to report any unrealized gain with respect to such
shares as an item of ordinary income, and any unrealized loss would be permitted
as an ordinary loss, but only to the extent of previous inclusions of ordinary
income. Any gain subsequently realized by the electing United States shareholder
on a sale or other disposition of Company shares also would be treated as
ordinary income, but such United States shareholder would not be subject to an
interest charge on his resulting tax liability. Special rules would apply to a
United States shareholder that held his Company shares prior to the first
taxable year for which the mark-to-market election was effective.
A more detailed discussion of the United States federal income tax rules
applicable to PFICs, including information relating to the filing of QEF
elections, may be found in the Company's 1999 Annual Report under the heading
"Certain tax information for United States shareholders."
DUE TO THE COMPLEXITY OF THE APPLICABLE TAX RULES, UNITED STATES
SHAREHOLDERS OF THE COMPANY ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE IMPACT OF THESE RULES ON THEIR INVESTMENT IN THE COMPANY AND ON
THEIR INDIVIDUAL SITUATIONS.
11
<PAGE>
ASA LIMITED
Incorporated in the
Republic of South Africa
(Registration No. 58/01920/06)
DIRECTORS
HENRY R. BRECK ROBERT J.A. IRWIN
(U.S.A.) (U.S.A.)
HARRY M. CONGER MALCOLM W. MACNAUGHT
(U.S.A.) (U.S.A.)
CHESTER A. CROCKER RONALD L. MCCARTHY
(U.S.A.) (South Africa)
JOSEPH C. FARRELL ROBERT A. PILKINGTON
(U.S.A.) (Great Britain)
JAMES G. INGLIS A. MICHAEL ROSHOLT
(South Africa) (South Africa)
------------------------------------------
WESLEY A. STANGER, JR., DIRECTOR EMERITUS
OFFICERS
ROBERT J.A. IRWIN, CHAIRMAN OF THE BOARD AND TREASURER
RONALD L. MCCARTHY, MANAGING DIRECTOR
CHESTER A. CROCKER, UNITED STATES SECRETARY
RANQUIN ASSOCIATES, SOUTH AFRICAN SECRETARY
DANA L. PLATT, ESQ., ASSISTANT SECRETARY
AUDITORS
ARTHUR ANDERSEN & CO., JOHANNESBURG, SOUTH AFRICA
ARTHUR ANDERSEN LLP, NEW YORK, N.Y., U.S.A.
COUNSEL
WERKSMANS, JOHANNESBURG, SOUTH AFRICA,
KIRKPATRICK & LOCKHART LLP, NEW YORK, N.Y., U.S.A.
CUSTODIAN
THE CHASE MANHATTAN BANK, N.A. NEW YORK, N.Y., U.S.A.
SHAREHOLDER SERVICES
LGN ASSOCIATES, FLORHAM PARK, NJ, USA (973) 377-3535
WEBSITE--HTTP://WWW.ASALTD.COM
TRANSFER AGENT
EQUISERVE-FIRST CHICAGO TRUST DIVISION, JERSEY CITY, N.J.,
U.S.A.
ASA LIMITED
[GRAPHIC OMITTED]
INTERIM
REPORT
FOR THE
SIX MONTHS
ENDED
MAY 31, 2000
